Report: Fraud in security checks

The process of conducting background checks for national security clearances is riddled with extensive fraud that can’t be adequately combatted, a government watchdog is set to tell a Senate subcommittee Thursday.

The clearance system has come under increased scrutiny after Edward Snowden, a government contractor with such a clearance, leaked information about government surveillance programs to the press.

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The Office of Personal Management doesn’t have the resources to properly oversee the program, leading to a backlog of reports of fraud to investigate, according to prepared testimony from Inspector General Patrick McFarlane.

”Our resources remain woefully inadequate, preventing us from performing the level of oversight that such an important program requires,” McFarlane says in prepared remarks.

In one example of fraud he’ll recount, 1,600 different background check reports were fabricated by one employee, who herself was hired on a faulty background check.

McFarlane will tell the subcommittee that 18 people have been convicted of creating false background checks since 2006, and two more have pleaded or are pleading guilty in the past month.

Nearly 5 million Americans have security clearances, a number that has made news since Snowden used his access to release secret information about National Security Agency surveillance programs.

Almost three-quarters of those individuals have “secret”-level clearances, and about 30 percent have a higher, “top secret”-level clearance.

McFarlane will tell Congress that the background check part of granting clearances is critically important, and dangerous if compromised.

“A background investigation is the first step in the issuance of any security clearance. If that background investigation is not thorough, accurate, and reliable, then all other decisions made related to the issuance of the security clearance are suspect,” he will say.

Other issues with the program include an inability to suspend individuals suspected of fraud. In one case McFarlane cites, an individual on leave from an OPM position found a job doing background checks for another federal agency while facing a pending criminal indictment for falsifying such reports.

A risk audit also found that the financial management of the investigative division responsible for the reports was particularly susceptible to fraud, waste and abuse.

McFarlane is scheduled to speak to a Senate Homeland Security and Governmental Affairs subcommittee at a hearing Thursday afternoon. Subcommittee members will also hear from representatives from the Department of Defense, which issues about 80 percent of the clearances, and the Government Accountability Office.